ROE

Return On Equity

A business measurement calculated by taking a year's worth of earnings and dividing it by the average shareholder's equity for that year. To calculate ROE, the earnings can be (1) taken directly from the Consolidated Statement of Earnings in the company's last annual filing with the SEC, (2) taken as the sum of the last four quarters' worth of earnings, (3) figured using the average of the last five or ten years' earnings, or (4) annualized, based on the last quarter's results.